. . . AND BILATERAL MEETINGS. Yeltsin and Kohl also agreed to hold two bilateral meetings next year, alternating between Germany and Russia. The first one, to be attended also by key ministers, will be held in spring in Germany, while the second - an informal summit - is to take place in summer at Lake Baikal, the Kremlin press service said. The two leaders also agreed that experts from the two nations will meet in about two weeks in Berlin to discuss the development of a European military-transport plane, to be based on the Russian-Ukrainian An-70. JG

ALIEV, SHEVARDNADZE AND LUCINSCHI DISCUSS CIS, GUAM. Speaking at a joint press conference in Baku on 27 November, Aliev and Lucinschi declared that they do not wish to see the CIS collapse, but Aliev added that it is "an illusion" to believe that it will become an effective international organization while conflicts persist between its members. Lucinschi said the CIS will become effective only when relations between its members become "honest and sincere," Interfax reported. The three presidents stressed that the new alignment between Georgia, Ukraine, Azerbaijan and Moldova is "a consultative body." Shevardnadze told journalists on 28 November that "these nations' cooperation does not contradict the interests of the Black Sea states or the CIS, and should not surprise anybody," ITAR-TASS reported. Lucinschi made clear that he does not support a military component to GUAM, according to Turan on 27 November. (See also "ENDNOTE") LF

The newest acronym to add spice to the New World Order alphabet soup risks confusing cartographers and laymen alike. Meeting in Strasbourg in mid-October on the sidelines of the Council of Europe summit, the presidents of Georgia, Ukraine, Azerbaijan and Moldova issued a joint communique registering their shared strategic interests. The four presidents further affirmed their intention to deepen political and economic ties and cooperation, both on a bilateral basis and within regional organizations, and their mutual interest in questions of regional security.

This quadrilateral statement marked the admittance of a fourth member to the "Union of Three" comprising Georgia, Azerbaijan and Ukraine. This alignment, the brainchild of Presidents Eduard Shevardnadze, Heidar Aliev and Leonid Kuchma, had taken shape during the fall of 1996 on the basis of a shared pro-Western orientation, mistrust of Russia, and the desire to profit jointly from the export of part of Azerbaijan's Caspian oil via Georgia and Ukraine. In the case of Azerbaijan and Georgia, dissatisfaction with Russia's track record as a mediator in the Karabakh and Abkhaz conflicts provided additional motivation.

Predictably, Moscow assumed -- wrongly -- that the impetus for this triple alignment had originated with the U.S. as part of a strategy to accelerate the erosion of Russia's influence in the Caucasus and Ukraine. Western powers, for their part, reacted with alarm and dismay, conveying the unequivocal message: "Don't rock the boat, don't risk anything that could irritate Russia," especially during the anticipated difficult period of horsetrading over NATO's planned expansion eastwards. Consequently, in public statements during the spring and early summer of 1997, Aliev and Shevardnadze both prudently denied the existence of any "axis," stressing that the accords concluded between their two countries and with Ukraine were exclusively economic in nature.

The unveiling during the summer of a new U.S. policy that identified both Central Asia and the Transcaucasus as spheres of national interest indirectly served to bestow Washington's approval on the Baku-Tbilisi-Kyiv alignment, and thereby to increase its attraction to other potential members.

Moldova's subsequent inclusion in the alignment served to formalize a convergence of interests that had emerged five months earlier. The so-called Flank Limitations Agreement modifying the1990 Treaty on Conventional Forces in Europe specifically allowed Russia to deploy increased amounts of weapons in the Transcaucasus, Ukraine and Moldova. Of the 32 states bound by the CFE Treaty, Georgia, Azerbaijan and Moldova ratified this Agreement only days before the deadline for doing so in mid-May, and expressed serious misgivings about the concessions to Russia which it contained.

At the Strasbourg meeting in October, Azerbaijan's Foreign Minister Hasan Hasanov had underscored the economic potential of GUAM, specifically Ukraine's and Moldova's interest in the TRASECA project intended to create a coordinated transport corridor from Central Asia via the Transcaucasus to Europe, and in the possibility of exporting part of Azerbaijan's Caspian oil via Ukraine or Romania. At a subsequent gathering of deputy foreign ministers from all four countries held in Baku in late November, however, the primary topic of discussion was regional security. On that occasion, Hasanov advocated coordinating security policy within the parameters of NATO's Partnership for Peace program, proceeding from the formula "16 +4" (meaning NATO's present sixteen members plus the four GUAM states). The strengthening of quadrilateral ties between GUAM members, Hasanov continued, should proceed parallel to those states' integration into European and Euro-Atlantic structures, and will contribute to strengthening regional security and stability.

Both Hasanov and Heidar Aliev explicitly denied that GUAM was directed either at Russia or at any other state, saying that the new union was open to other would-be members. There has not been any official Russian reaction to the Baku meeting, but Armenian Foreign Ministry spokesman Arsen Gasparian played down its implications for his country. Gasparian noted that "Armenia enjoys normal relations with Georgia, Moldova and Ukraine, and we are really convinced that this quadripartite cooperation is not aimed at any other country." (This reaction is in marked contrast to Hasanov's and Aliev's repeated vehement condemnation of the Armenian-Russian Treaty on Friendship, Cooperation and Mutual Assistance signed in late August which they perceive as directed against Azerbaijan.) Gasparian conceded, however, that in the light of the unresolved Karabakh conflict it is unlikely that Armenia will join GUAM.

As yet, GUAM remains a purely informal alignment, in contrast, say, to the CIS and the Russia-Belarus Union, but potentially more viable than either of those. Its chances of long-term survival will depend on two factors. The first is whether Russia reacts with paranoia or equanimity to the construction of new political, economic and security alignments in Europe from which it is excluded. The second is whether the choice of route(s) for the Main Export Pipeline for Azerbaijan's and Kazakhstan's Caspian oil could drive a wedge between GUAM members, with Azerbaijan (under pressure from the U.S.) opting for the southern route to the Turkish terminal at Ceyhan, and the remaining three favoring the Western variant to Supsa on Georgia's Black Sea coast, and thence via tanker to Odessa and westwards through Ukraine.

UKRAINIAN PRESIDENT HOSTS LATVIAN, LITHUANIAN LEADERS. Ukrainian President Leonid Kuchma held talks near Kyiv on 29 November with his Latvian and Lithuanian counterparts, Ukrainian media reported. The three discussed how to integrate with the West, how to expand trade among the three, and also how to deal with the increasingly authoritarian regime of Belarusian President Alyaksandr Lukashenka. PG

MIXED SIGNALS ON UKRAINIAN ECONOMY. The International Monetary Fund praised Ukraine's progress in reducing inflation and managing its economy and thus released a $103 million tranche of standby credit to Kyiv, Interfax reported 28 November. But a day earlier, Ukrainian President Kuchma directed his government's Security Service to investigate Ukrainian financial markets. His action followed reports that some Russian banks might be speculating against the Ukrainian national currency. PG